CFA Level I · CFA Level I Exam · Real Estate and Infrastructure
Which of the following characteristics is most likely associated with infrastructure assets in the brownfield category?
Brownfield infrastructure refers to existing assets that are already built and operating, so they have a track record and established cash flows. Greenfield projects, by contrast, are new builds that carry construction risk. Brownfield assets are also frequently held privately, for example through concessions or privatizations.
- AThey are existing assets that have been operating and generate established cash flowsCorrect
- BThey are assets that are not yet built and carry construction risk
- CThey are assets that are owned by a government and cannot be privately held
Explanation
Brownfield investments are existing infrastructure assets that are already built and operating, so they have an operating history and established cash flows. Option B describes greenfield projects. Option C is wrong because brownfield assets can be held privately, for example through privatization or concessions.
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